We warned last month that under the covers Chicago PMI looked a lot weaker than the headlines---and this morning's collapse confirms that.
Against expectations of a small rise to 63.0, Chicago PMI plunged from 62.6 to 52.6 (13-month lows) for the biggest miss on record. According to the release itself, "A monthly fall of this magnitude has not been seen since October 2008 ."
This was an 8 standard-deviation miss from analyst expectations (Joe Lavorgna was on the high side at 63.0). New orders, inventory, production, order backlogs, and prices paid all dropped (but employment rose?). This is the biggest 2-month drop since Lehman (and 2nd biggest since 1980). We await the seasonal adjustment "correction" as MNI get the call from Yellen.
This commentary appeared on the Zero Hedge website at 9:55 a.m. EDT---and I thank reader M.A. for today's first story.
Following last week's "seasonal volatility"-driven plunge in claims to new cycle lows, this week saw a 32k rise to 302k, missing expectations for the first time in 4 weeks.
However, what is more worrisome for bullish equity market investors is the surge in employment costs. The Employment Cost Index jumped 0.7% (beating expectations of a 0.5% rise) - its biggest jump since Sept 2008. This is the biggest variance from expectations in 8 years and suggests Janet Yellen's 'slack' just got a lot tighter.
This is the second Zero Hedge article in a row from reader M.A.---and it was posted on their website at 8:40 a.. EDT on Thursday.
Health-care insurance premiums for individuals in California rose between 22 percent and 88 percent in 2014 from last year, even after the federal health-care overhaul, the state’s insurance commissioner said.
The rate increases, with variation for geography and age, were masked by federal subsidies that the Patient Protection and Affordable Care Act provides to 88 percent of the 1.4 million Californians who purchased health care through the state’s exchange, Insurance Commissioner Dave Jones said.
Jones, a Democrat, is pushing a statewide ballot measure for November known as Proposition 45 that would give him regulatory say on proposed premium increases. The measure is opposed by insurance companies, which have said that it would actually cause rates to rise while harming the quality of care.
This short Bloomberg piece, filed from Sacramento, showed up on their website at 5:09 p.m. Denver time on Tuesday---and I thank Victor George for sharing it with us.
The U.S. dollar is the dominant global reserve currency. All markets, including stocks, bonds, commodities, and foreign exchange are affected by the value of the dollar.
The value of the dollar, in effect, its “price” is determined by interest rates. When the Federal Reserve manipulates interest rates, it is manipulating, and therefore distorting, every market in the world.
The Fed may have some legitimate role as an emergency lender of last resort and as a force to use liquidity to maintain price stability. But, the lender of last resort function has morphed into an all-purpose bailout facility, and the liquidity function has morphed into massive manipulation of interest rates.
The original sin with regard to Fed powers was the Humphrey-Hawkins Full Employment Act of 1978 signed by President Carter. This created the “dual mandate” which allowed the Fed to consider employment as well as price stability in setting policy. The dual mandate allows the Fed to manage the U.S. jobs market and, by extension, the economy as a whole, instead of confining itself to straightforward liquidity operations.
Janet Yellen, the Fed chairwoman, is a strong advocate of the dual mandate and has emphasized employment targets in the setting of Fed policy. Through the dual mandate and her embrace of it, and using the dollar’s unique role as leverage, she is a de facto central planner for the world.
This commentary by Jim showed up on the dailyreckoning.com Internet site on Wednesday sometime---and I thank Harold Jacobsen for sending it our way.
CIA Director John Brennan apologized to Senate intelligence committee leaders after his inspector general found that CIA employees acted improperly when the CIA searched Senate computers earlier this year.
Agency spokesman Dean Boyd said in an email to The Associated Press on Thursday that Brennan has convened an accountability board that will investigate the conduct of the CIA officers and discipline them, if need be.
The Justice Department has so far declined to pursue criminal charges against the employees, who searched the computers for information gathered in the course of a Senate investigation into the CIA's interrogation techniques.
One look at the photo of Brennan tells you that he's not someone you would want to meet in a dark alley. This newsmax.com article showed up on their Internet site at 12:18 p.m. EDT on Thursday---and I thank Brad Robertson for finding it for us.
A federal judge in New York City sided with the United States government on Thursday and said that Microsoft must comply with a search warrant compelling the corporation to surrender customer data it stores overseas.
The multi-national computer company has for months now refused to turn over emails and other digital content requested by authorities in the US because the information in question, Microsoft insists, is kept on data servers physically located in Ireland. Previously, Microsoft said in a statement that “a US prosecutor cannot obtain a US warrant to search someone's home located in another country, just as another country's prosecutor cannot obtain a court order in her home country to conduct a search in the United States.”
But District Judge Loretta Preska ruled from a Manhattan courtroom on Thursday that, contrary to the company’s objections, Microsoft must produce the information sought pursuant to a US-based investigation.
"It is a question of control, not a question of the location of that information," Preska said at the conclusion of a two-hour court hearing, Reuters reported from New York.
This very interesting news item appeared on the Russia Today Internet site at 6:49 p.m. Moscow time early Thursday evening, which was 10:49 a.m. EDT.
After negotiations between the Argentine government and vulture funds, led by US Special Master Daniel Pollack, failed New York District Judge Thomas Griesa called for a new hearing between the parties for tomorrow at 12 pm (Argentina time).
The US judge overseeing Argentina's dispute with a group of creditors said a hearing he has set for Friday morning in the case will be "regarding the recent default by the Republic of Argentina," according to a court filing posted today.
On Wednesday, Argentina and a group of hedge funds holding some of its bonds failed to come to terms on a deal to avoid the country falling into default on its debt for the second time in more than 12 years.
A court's official informed today holdout representatives and Argentine officials will be part of the meeting.
The above four paragraphs are all there is to this news item that was posted on the Buenos Aires Herald website yesterday---and it's the second contribution of the day from reader M.A.
Jim Rickards, Senior Managing Director at Tangent Capital, discusses whether Argentina's second default on its sovereign debt will have a contagion effect on global financial markets.
The video/audio interview was posted on the CNBC website just before midnight on Wednesday evening---and it's worth your time. I thank Harold Jacobsen for tracking this story down for us.
Germany and Russia have been working on a secret plan to broker a peaceful solution to end international tensions over the Ukraine.
The Independent can reveal that the peace plan, being worked on by both Angela Merkel and Vladimir Putin, hinges on two main ambitions: stabilising the borders of Ukraine and providing the financially troubled country with a strong economic boost, particularly a new energy agreement ensuring security of gas supplies.
More controversially, if Ms Merkel’s deal were to be acceptable to the Russians, the international community would need to recognise Crimea’s independence and its annexation by Russia, a move that some members of the United Nations might find difficult to stomach.
Sources close to the secret negotiations claim that the first part of the stabilisation plan requires Russia to withdraw its financial and military support for the various pro-separatist groups operating in eastern Ukraine. As part of any such agreement, the region would be allowed some devolved powers.
This article appeared on the independent.co.uk Internet site on Thursday sometime---and I thank South African reader B.V. for bringing it to our attention.
Swiss banking giants UBS and Credit Suisse have confirmed that they are among a number of banks that have come under the scrutiny of a United States-led investigation into so-called ‘dark pool’ trading.
Dark pool platforms enable investors to buy and sell positions anonymously, thus shielding their trades from rivals. The secretive activity is often combined with a high-frequency trading service that employs complex computer algorithms to complete multiple transactions within fractions of a second.
The investigatory floodgates were opened last month when New York prosecutors accused British bank Barclays of unfairly boosting profits by misleading investors in its dark pool. The bank denies the charges.
This short news item appeared on the swissinfo.ch Internet site at 2:26 p.m. Europe time yesterday afternoon---and it's the second offering in a row from reader B.V.
The European Union has imposed sectorial sanctions on five Russian banks, including the country’s biggest, Sberbank, as part of economic steps that Europe, along with the US, have taken against Moscow over the crisis in Ukraine.
The list, published Thursday, includes Sberbank, VTB Bank, Gazprombank, Vnesheconombank (VEB) and Russian Agriculture Bank (Rosselkhozbank).
These financial entities will be banned from raising capital on the EU’s capital markets.
The sanctions – targeting banks with state ownership of over 50 percent – enter into force on August 1 and will be valid for one year. The decision can be reviewed after three months.
This article appeared on the Russia Today Internet site at 3:48 p.m. Moscow time on their Thursday afternoon.
They are the toughest sanctions imposed on Russia since the Cold War, but who will they hurt the most?
The E.U.'s latest sanctions package comes amid anger over the Kremlin's support for Ukrainian rebels, who stand accused of shooting down a Malaysia Airlines passenger jet and killing 298 people.
The measures include an arms embargo, restrictions on offshore energy exploration and curbs on Russian banks trading in European markets.
The sanctions are intended to strangle the Russian economy and convince President Vladimir Putin to abandon his support for the separatists in Ukraine.
This commentary put in an appearance on the bbc.com Internet site at 9:24 a.m. BST on their Wednesday morning---and I thank reader B.V. for bringing it to my attention, and now to yours. It's worth reading.
Why did President Obama look so lost Monday [July 21 - Ed] while trying to make a case against Russia in the downing of the Malaysian Boeing in Ukraine? And how come the U.S. journalists seem to know more than experts and intelligence agencies investigating the case? The Burning Point is discussing it with Paul Craig Roberts, former assistant secretary of the U.S. Treasury, currently the chairman of The Institute for Political Economy.
Mr. Roberts, the shooting down of the Boeing passenger airplane in Ukraine is really making headlines. But sometimes it seems that many media outlets already know everything about what appears to be still a mystery to experts.
PCR — This is Washington’s propaganda show. They have seized on the opportunity to demonize Russia, especially President Putin. Washington is disturbed by a number of things – one is the rise of Russia and China as powers. This is inconsistent with the Wolfowitz Doctrine, which is the basis of American foreign policy. The Wolfowitz Doctrine requires that the U.S. prevent the rise of other powers. So, that is the big backdrop, the big background of it. And what Washington is doing, they have seized on this airliner catastrophe, whoever is responsible, whatever is the cause, in order to blame Russia. And so instantly as soon as the world learned that the Malaysian airliner had gone down, Washington was controlling the explanation. It was out with the story that Russia did it, or the Russian government helped the ‘separatists’ in Eastern Ukraine do it. And that it seemed to be orchestrated. And such an orchestration requires advanced effort, advanced timing and that almost implies that the US was involved in the catastrophe.
So, what we have heard is accusations and insinuations from the US government, the American media and as far as I can tell much of the European media. There is no evidence, but the accusation and insinuations are repeated over and over, and this is a propaganda trick to establish the truth by repetition. There has been no evidence presented by Washington and no response from Washington to the Russian government’s pleas to look at evidence, to have a non-politicized expert international investigation. It’s only the Russian government that has released any evidence; they have released the satellite photos of the Ukrainian missile batteries in place; they have released the flight path of Ukrainian jet, which approached the Malaysian airliner prior to its demise. And they repeatedly asked for evidence and Washington provides not.
This 15:38 minute audio interview was posted on the RIA Novosti website nine days ago on July 23---and it's a must listen. But if you want to "read all about it"---there's a transcript as well. I thank reader B.V. for another contribution to today's column.
Paul Craig Roberts had this to say as an introduction to this very long Martenson essay---"On a number of occasions recently I have made the point that the psychopaths in control of Washington are driving the West to war with Russia. The lies that the Obama regime and Western presstitute media are hurling at President Putin are even more blatantly false that the lies Washington used against Saddam Hussein, Gaddafi, Assad, the Taliban, and Iran, and the lies are far more reckless. Russia has a nuclear arsenal as large as Washington’s, and Russia is very much aware that for 13 years Washington’s lies and demonizations of countries are the preludes to launching military attacks on the countries."
"It is completely obvious that no one in Washington has enough sense to be in government. In Washington power is in demonic and idiotic hands. Washington consists of the largest collection of criminal fools in human history."
"You have read what I have had to say. Now you can read it from Chris Martenson."
"The threat to life on earth has never been as great as it is at this time. The crazed fools in Washington and the reckless scum that comprise the Western media are brewing Armageddon."
The first half of this commentary by Chris was posted on the Zero Hedge website at 6:15 p.m. EDT yesterday evening. You have to sign up [for free] to read the second half. But the first half is an absolute must read, especially for all serious students of the New Great Game---and is, without question, the most important article in today's column. I thank reader B.V. for his final contribution of the day.
The Islamist militant group Ansar al-Sharia has declared Benghazi an ‘Islamic Emirate’ after claiming to have taken total control of Libya's second largest city, seizing military barracks with rockets and ammunition.
The official spokesperson of the extremist group told local Radio Tawhid that "Benghazi has now become an Islamic emirate."
The announcement has been denounced by pro-government militia forces.
"The national Libyan army is in control of Benghazi and only withdrew from certain positions for tactical reasons. The claim that Benghazi is under the control of militias is a lie," Khalifa Haftar, a former army general, who launched a self-declared offensive against militants in May, told Al Arabiya channel.
I'm sure that if the U.S. State Department sent in Hillary Clinton, she would have this all fixed up in no time. This Russia Today news item was posted on their website at 8:05 p.m. on Thursday evening Moscow time, which was shortly after 12 o'clock noon in New York.
West Africa is grappling with the largest outbreak of Ebola virus in history, and concerns are mounting that the hemorrhagic fever could spill across international borders.
Here is some advice from the World Health Organization (WHO) and the U.S. Centers for Disease Control and Prevention (CDC) on how people can protect themselves against Ebola.
Symptoms of Ebola include fever, headache, joint and muscle aches, weakness, diarrhea, vomiting, stomach pain, lack of appetite and in some cases bleeding.
"Transmission is through direct contact with bodily fluids of an infected person, or exposure to objects such as needles that have been contaminated with infected secretions," said Stephan Monroe, deputy director of the CDC's National Center for Emerging and Zoonotic Infectious Diseases.
This news item, filed from Washington, appeared on the channelnewsasia.com Internet site at 10:53 p.m. Singapore time on their Thursday evening---and I thank reader M.A. for sharing it with us.
Over the past 6 months, there has been much talk about the strategic proximity between Russia and China, made even more proximal following the "holy grail" gas deal announced in May which would not have happened on such an accelerated time frame had it not been for U.S. escalation in Ukraine.
And yet little has been said about that other just as crucial for the "new BRIC-centric world order" relationship, that between Russia and India. That is about to change when yesterday the Russian central bank announced that having been increasingly shunned by the west, Russia discussed cooperation with Reserve Bank of India Executive Director Shrikant Padmanabhan. The punchline: India agreed to create a task group to work out a mechanism for using national currencies in settlements.
This Zero Hedge article put in an appearance on their website at 11:44 a.m. EDT on Thursday---and it's the final offering of the day from reader M.A., for which I thank him.
1. Egon von Greyerz: "Horrifying Worldwide Financial Destruction to Shock Investors" 2. Gerald Celente: "Terrifying Crash---and the Death of the Global Ponzi Scheme" 3. Jeffrey Saut: "Stock Market Plunge, Gold, Crisis and Contagion"
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
The company that runs platinum and palladium fixings in London is seeking a new administrator for the price-setting process after similar changes were proposed for rituals in gold and silver.
The London Platinum & Palladium Fixing Company Ltd. will “shortly” start a request-for-proposals exercise for firms interested in assuming responsibility for the procedure that takes place each business day at 9:45 a.m. and 2 p.m. by phone, it said today in a statement. BASF Metals Ltd., Goldman Sachs Group Inc., HSBC Holdings Plc and Standard Bank Plc conduct the fixings, the London Platinum & Palladium Market website shows.
“With both the silver and gold fixings undergoing important structural change, it certainly makes sense for the London platinum and palladium fixing company to reconsider its own fixing process as well,” Nic Brown, head of commodities research at Natixis SA in London, said today by e-mail. “Reform of the fixings should help to reinforce confidence in the structure of London’s precious metal markets.”
This Bloomberg article, filed from London, was posted on their Internet site at 4:37 a.m. Denver time yesterday morning---and I found it on the Sharps Pixley website.
Chinese gold jewellery demand fell for the first time in eight years in the second quarter and could drop as much as 20 percent in the full year, a leading precious metals consultancy said.
Many Chinese jewellery makers saw a 40-60 percent drop in gold fabrication in the second quarter, Sara Zhao, a GFMS analyst at Thomson Reuters, told the Reuters Global Gold Forum on Thursday.
Other industry sources also said higher gold prices and a weaker yuan are weighing on demand, and fresh buying has also been tempered by last year's record purchases.
Jewellery demand - the biggest segment of Chinese gold consumption - fell significantly in the April-June period, the first year-on-year drop since the second quarter of 2006, Zhao said.
This Reuters story, co-filed from Singapore and London, was posted on their website at 1:26 p.m. BST on their Thursday afternoon---and it's another article I found posted on the sharpspixley.com Internet site.
The West Point Mint is one of four current production facilities operated by the United States Mint. It is located near the U.S. Military Academy in West Point, New York, situated on four acres of land that used to belong to the Academy under the Department of Defense.
The facility was erected in 1937 as the West Point Bullion Depository and originally served as a storage facility for silver bullion, earning the nickname “The Fort Knox of Silver.” In 2005, the facility was remodeled and a second story was added to the building.
In 1980, the Depository would begin striking the American Arts Gold Medallions and also begin storing gold in its vaults. The medallions had been authorized by Congress and conceived as a method of gold bullion investment similar to the South African Krugerrand. The one ounce and one-half ounce gold pieces depicted notable American artists and were minted from 1980 to 1984 without mint marks.
The first legal tender gold coins were struck at West Point in 1983. These $10 gold commemorative coins were issued for the 1984 Los Angeles Olympic Games and bore the “W” mint mark. Additional commemorative gold coins bearing the “W” mint mark would be produced in subsequent years. In 1986, the facility began production of the American Gold Eagle bullion coins, which sold more than 1.7 million ounces in the first year of release.
This very interesting article appeared on the coinupdate.com Internet site on July 30---and is certainly worth reading if you have the interest. I thank West Virginia reader Elliot Simon for digging it up for us.
A federal judge on Wednesday ordered Bank of America Corp to pay a $1.27 billion penalty for fraud over shoddy mortgages sold by the former Countrywide Financial Corp.
U.S. District Judge Jed Rakoff in Manhattan ruled after a jury last October found the second-largest U.S. bank liable for the sale by Countrywide of defective loans to government-controlled mortgage companies Fannie Mae and Freddie Mac.
Rakoff also ordered former mid-level Countrywide executive Rebecca Mairone, who was also found liable and was the only individual charged, to pay $1 million, citing her "leading role" in the fraud and calling some of her testimony "implausible."
While the bank's penalty was below the $2.1 billion sought by the U.S. Department of Justice, it marks another legal defeat for Bank of America over its disastrous July 2008 purchase of Countrywide, which has cost tens of billions of dollars in litigation, loan buybacks and write downs.
This Reuters story, filed from New York, showed up on their website at 4:44 p.m. EDT Wednesday afternoon---and today's first story is courtesy of Roy Stephens.
For the first time ever, the average price for a kilowatt hour (KWH) of electricity in the United States has broken through the 14-cent mark, climbing to a record 14.3 cents in June, according to data released last week by the Bureau of Labor Statistics.
Before this June, the highest the average price for a KWH had ever gone was 13.7 cents, the level it hit in June, July, August and September of last year.
The 14.3-cents average price for a KWH recorded this June is about 4.4 percent higher than that previous record.
This longish article was posted on the cnsnew.com Internet site at 2:20 p.m. EDT on Tuesday---and I thank West Virginia reader Elliot Simon for finding it for us.
The Commerce department reported Q2 GDP which blew estimates out of the water, printing at 4.0%, above the declining 3.0% consensus, as a result of a surge in Inventories and Fixed Investment, both of which added over 2.5% of the total print, while exports added another 1.23% to the GDP number.
As the BEA noted, "The Bureau emphasized that the second-quarter advance estimate released today is based on source data that are incomplete or subject to further revision by the source agency. The "second" estimate for the second quarter, based on more complete data, will be released on August 28, 2014."
If you believe this, dear reader, then there's a bridge for cheap somewhere in your future. Expect this to be revised downwards as the months pass. This news item appeared on the Zero Hedge website at 10:30 a.m. EDT on Wednesday morning---and I thank Harry Grant for sending it our way.
There are certain underlying factors that play huge roles in gauging and signaling the stock market's general direction.
One of those is the level of margin debt at the New York Stock Exchange. This is the total dollar value of all securities purchased on that exchange using margin debt.
According to the latest report, NYSE margin debt is only 0.3% away from making a brand new all-time high.
This tiny story has an absolute must see chart. All of this was posted on thestreet.com Internet site at 10:25 a.m. EDT on Tuesday morning---and it's something I found in yesterday's edition of the King Report.
Former Federal Reserve Chairman Alan Greenspan talks about the outlook for financial markets, the U.S. economy and Fed policy. He speaks with Betty Liu and Tom Keene on Bloomberg Television's "In the Loop."
This 17:58 minute video clip was posted on the Bloomberg website yesterday sometime---and I must admit that I haven't had the time to watch it. I thank Casey Research's own Marin Katusa for passing it around yesterday.
Claudio Grass, Managing Director of Global Gold Switzerland, talks to Dr. Marc Faber about investing, markets and precious metals.
I wasn't expecting much when I started reading this interview, but quickly changed my mind. Marc lets it all hang out, especially when he's got the time to do it, as he does here---and he's not being manhandled by the main stream media like he was on CNBC the other day.
It was posted on the goldsilverworlds.com Internet site on Wednesday sometime---and it's definitely worth reading.
One of my favorite podcasts to listen to is The Peter Schiff Show.
Peter always does an excellent job of dissecting the latest economic news and cutting through the smoke and mirrors of government statistics.
Recently he had Doug Casey on his radio show to discuss what’s really happening with the economy. And it’s nothing close to what the talking heads in the financial media would have you believe.
Nick Giambruno, the Senior Editor over at the InternationalMan.com Internet site, sent me this commentary yesterday, as he thought you might enjoy it. Nick, who wrote "all of the above," also added in his e-mail that it's "A good discussion on the economy and gold [towards the end]".
Senior bankers could face bonuses being clawed back up to seven years after they have been awarded under new rules proposed by the Bank of England's Prudential Regulation Authority and the Financial Conduct Authority.
Andrew Bailey, the PRA's chief executive, said this would mean bankers would be more accountable for their own actions. Regulators around the world are attempting to weed out bad behaviour by making individuals responsible for risky or illegal activity, rather than the institutions themselves.
"We believe that enhancing individual accountability and improving the alignment of risk and reward should have a positive impact on behaviour and culture within banks," Mr Bailey said, outlining rules on bonus deferrals, clawbacks and criminal offences.
This commentary appeared on The Telegraph's website at 12:25 p.m. BST yesterday---and I thank South African reader B.V. for sending it our way.
The head of the review into standards in the British banking industry is this week expected to reignite the question of whether an oath for bankers is needed despite rejecting the idea when producing his original report.
Sir Richard Lambert, the former director general of the CBI, is scheduled to launch a research document which promotes the need for bankers to swear an individual “oath.”
His raising the idea of a Hippocratic-style oath - similar to the one sworn by doctors at the start of their career - will come even though his February review into how to continue the rehabilitation of the banking industry in the wake of the financial crisis dismissed the need for one.
Despite its merit, I doubt very much if this idea will go anywhere. This is another news item from The Telegraph. This one was posted at 12:08 p.m. BST on Monday---and it's the second offering of the day from Roy Stephens.
Bond yields have fallen to the lowest level in modern history in Germany, France and the eurozone’s core states, signalling a high risk of deflation and mounting concerns about sanctions against Russia.
The yield on German 10-year bonds fell to a record low of 1.11pc in intra-day trading, partly on safe-haven flows. French yields dropped in tandem to 1.5pc. These levels are far below rates hit during the 1930s or even during the deflationary episodes of the 19th Century.
“Yields fell this low in Genoa in the 15th century but there has been nothing like this in Europe in modern times,” said professor Richard Werner, from Southampton University. “This reflects the weakness in nominal GDP and a slow economic implosion caused by credit contraction. The European Central Bank is at last starting to act but it is only scratching the surface.”
This Ambrose Evans-Pritchard offering appeared on the telegraph.co.uk Internet site at 8:13 p.m. BST on Tuesday---and it's the second contribution in a row from Roy Stephens. There was another story from The Telegraph about this on Tuesday. It's headlined "European bond yields enter the death zone"---and I found it in yesterday's edition of the King Report.
The spigot of global reserve stimulus is slowing to a trickle. The world's central banks have cut their purchases of foreign bonds by two-thirds since late last year. China has cut by three-quarters.
These purchases have been a powerful form of global quantitative easing over the past 15 years, driven by the commodity bloc and the rising powers of Asia.
They have fed demand for US Treasuries, Bunds and Gilts, as well as French, Dutch, Japanese, Canadian and Australian bonds and parastatal debt, displacing the better part of $12 trillion into everything else in a universal search for yield. Any reversal would threaten to squeeze money back out again.
Jens Nordvig, from Nomura, said net foreign reserve accumulation by central banks fell to $63bn in the second quarter of this year, from $89bn in the first quarter, and $181bn in the fourth quarter of 2013. These data are adjusted for currency swings, and are fresher than the delayed figures published by the International Monetary Fund.
"There are major shifts going on global capital markets. People have been lulled into a false sense of security by low volatility and they haven't paid attention. We're not seeing any risk aversion in financial markets," he said.
This commentary by Ambrose Evans-Pritchard appeared on The Telegraph's website at 8:31 p.m. BST yesterday evening---and it's certainly worth skimming. Roy Stephens sent it our way just before I hit the send button on today's column.
1. Coordinated Sanctions Aim at Russia’s Ability to Tap Its Oil Reserves: The New York Times 2. Moscow: U.S. will feel ‘tangible losses’ from ‘destructive, myopic’ sanctions: Russia Today 3. E.U. sanctions: Moscow disappointed by E.U.’s inability to act independently of U.S.: Russia Today 4. E.U. sanctions on Russia will hit U.K. economy’ – Foreign Secretary: Russia Today 5. Moscow fights back after sanctions; battle rages near Ukraine crash site: Reuters
[All of the above stories are courtesy of Roy Stephens, for which I thank him]
Moscow is concerned by reports that Ukraine’s government troops have used ballistic missiles against independence supporters in the country’s east, Russian Foreign Minister Sergei Lavrov said Wednesday.
Ukraine’s President Petro Poroshenko Tuesday confirmed the country’s readiness to provide access to international experts to the crash site of the Malaysia Airlines passenger plane in Donetsk Region, declaring a unilateral ceasefire within a 20-kilometer (12-mile) radius.
“Now, unfortunately, actions suggest the opposite: Donetsk, Luhansk and other villages in these regions are being shelled with Grad rocket launchers, artillery and tanks.”
On Tuesday, citing U.S. officials CNN reported that Ukraine’s government troops used short-range ballistic missiles in the east. The weapons have a range of about 50 miles and pack warheads of up to 1,000 pounds.
This RIA Novosti article appeared on their Internet site at 6:27 p.m. Wednesday evening Moscow time, which was 10:27 a.m. EDT. It's courtesy of Roy Stephens.
“Russia will continue doing its utmost to end the bloodshed and create conditions for the negotiations between the conflicting parties in accordance with the April 17 Geneva Accords made by Russia, the US, EU and Ukraine. The goal of this document is the immediate launch of a nationwide dialogue involving all the regions and seeking a political settlement that would ensure the rights of all the citizens and regions of Ukraine,” Lavrov said in Dushanbe.
According to the minister, Kiev authorities who carried out a coup in February ignored the requests of southeastern Ukraine to equal footing in long-anticipated constitutional reforms. Kiev is now seeking a military victory over the local defense forces forced to take up arms to defend their lands.
“The deep crisis in Ukraine is of high concern. Despite numerous warnings to our Western partners against attempts to make Ukraine choose between the West and the East, we were not heard. As a result, the country was plunged into a civil war,” Lavrov said.
This story is also from the RIA Novosti website yesterday evening Moscow time as well---and it's also courtesy of Roy Stephens.
The British Prime Minister, David Cameron, has said Britain was not going to "launch a European war or send the fleet to the Black Sea" over the Ukraine crisis, applying economic pressure instead.
Mr. Cameron, was addressing a Q&A session with staff at the headquarters of United Utilities in Warrington when he said that the West had to stand up to Russia.
The Prime Minister alluded to the lessons the U.K. learned dealing with Germany’s aggression in Europe before the first and second world wars.
You'll need your barf bag handy to read this garbage commentary from Cameron. It was posted on the Russia Today website at 6:55 p.m. Moscow time yesterday evening---and Roy slid it into my in-box just after midnight this morning.
The extraordinary propaganda being conducted against Russia by the U.S. and U.K. governments and Ministries of Propaganda, a.k.a., the “Western media,” have the purpose of driving the world to war that no one can win. European governments need to rouse themselves from insouciance, because Europe will be the first to be vaporized due to the U.S. missile bases that Europe hosts to guarantee its “security.”
As reported by Tyler Durden of Zero Hedge, the Russian response to the extra-legal ruling of a corrupt court in the Netherlands, which had no jurisdiction over the case on which it ruled, awarding $50 billion dollars from the Russian government to shareholders of Yukos, a corrupt entity that was looting Russia and evading taxes, is telling. Asked what Russia would do about the ruling, an advisor to President Putin replied, “There is a war coming in Europe.” Do you really think this ruling matters?”
The West has ganged up on Russia, because the West is totally corrupt. The wealth of the elites is based not only on looting weaker countries whose leaders can be purchased (read John Perkins’ Confessions of an Economic Hit Man for instruction on how the looting works), but also on looting their own citizens. The American elites excel at looting their fellow citizens and have wiped out most of the US middle class in the new 21st century.
This short, but absolute must read essay from Paul, was posted on his website on Monday---and I thank reader U.D. for sharing it with us.
So Obama, Merkel, Cameron, Hollande and Italian Premier Matteo Renzi - let's call them the Fab Five - get on a video conference call to muster their courage and "increase pressure" asking for a cease-fire in Gaza. Later in the day, Israel's Benjamin "Bibi" Netanyahu delivers his answer, in plain language: he remains dead set on achieving his version of a Final Solution to Gaza.  With or without "pressure".
So what's left for the Fab Five after having their illustrious Western collective behinds solemnly kicked? They decide to dump Gaza and instead sanction Russia - again! How brilliant is that as an exit strategy?
Not even Hollywood could come up with such a plot; Israel gets away with unlawful premeditated mass murder of civilians, while Russia gets framed for a (smaller-scale) airborne mass murder of civilians that has all the makings of being set up by the Kiev vassals of Russia's Western "partners".
Here's another absolute must read, as Pepe doesn't mince words or gild lilies. His commentary showed up on the Asia Times Internet site yesterday sometime---and it's also courtesy of Roy Stephens.
The U.S. has barred a shipment of Kurdish crude oil from reaching the Texas coast amid concerns independent oil sales from Kurdistan could further weaken Iraq's fragile central government as it struggles to contain a Sunni military offensive.
A U.S. District judge ordered a U.S. Marshal to seize the cargo — about 1 million barrels of crude oil, worth about $100 million — aboard the tanker United Kalavryta in response to a complaint filed by the Iraqi government claiming the oil was smuggled out of Kurdistan without its permission.
However, the tanker, anchored some 60 miles off the Galveston coast, is in international waters and thus outside U.S. jurisdiction. If it moves in closer so that smaller vessels can deliver its oil to shore, the U.S. Marshal will act on the court warrant and seize the cargo from those vessels, spokesman Dave Oney said.
This AP story, filed from Fort Worth, Texas at 5:30 p.m. CDT on Tuesday afternoon, was picked up by the finance.yahoo.com Internet site---and I thank reader Victor George for sending it. There was a similar story posted on the aljazeera.com Internet site yesterday---and it's headlined "U.S. judge says unable to seize Kurdish oil". It's courtesy of reader B.V.---and it's worth reading.
U.S. Secretary of State John Kerry forecast a transformation on Wednesday (July 30) in Washington's troubled relations with India as he headed to New Delhi for ice-breaking talks with new Prime Minister Narendra Modi.
For the past two decades, the world's two largest democracies have described themselves as natural allies, sharing similar concerns over China's rise and Islamic extremism. but incidents including the U.S. arrest of an Indian diplomat last year sent ties plunging to their lowest point in years, and the Hindu nationalist Modi had been treated as an outcast by Washington before he led his party to a decisive victory in April-May elections.
A new row is brewing over a customs deal but the Obama administration has been keen to emphasise areas where the two sides can make common cause in the build-up to the visit by Kerry and US Commerce Secretary Penny Pritzker who is already in India.
This news item put in an appearance on the channelnewsasia.com Internet site at 4:03 p.m. Singapore time on their Wednesday afternoon---and I thank reader M.A. for bringing it to our attention.
A clash in Xinjiang, home to China's mostly Muslim Uighur minority, left nearly 100 people dead or wounded, an exile group said on Wednesday (July 30) after what authorities called a "terror attack" on a police station and township.
Dozens of civilians and assailants were killed and injured in the attack by a gang armed with knives and axes, Chinese state media reported late Tuesday.
Official news agency Xinhua said police officers at the scene shot dead dozens of members of the mob. It did not give a precise breakdown of the casualties from Monday's incident, and information in Xinjiang is often difficult to verify independently.
Xinjiang's government web portal Tianshan on Wednesday described the violence as a "terror attack" that killed or wounded "several tens" of Uighur and Han. The Han are China's largest ethnic group, whose members have migrated in large numbers to Xinjiang in recent decades.
This is the second story in a row from the channelnewsasia.com Internet site on Wednesday---and it's also courtesy of reader M.A.
China’s trade numbers still don’t add up.
A discrepancy between Hong Kong and Chinese figures for bilateral trade remains even after a crackdown last year on Chinese companies’ use of fake export-invoicing to evade limits on importing foreign currency. China recorded $1.31 of exports to Hong Kong in June for every $1 in imports Hong Kong tallied from China, for a $6.4 billion difference, based on government data compiled by Bloomberg News.
Analysts offered at least three possible explanations for the gap, including differences in how China and Hong Kong record trade in goods that pass through the city, as well as a persistence in fraud at a lower level. Any discrepancies make it tougher to gauge the impact of global demand on a Chinese economy that’s projected for the slowest growth in 24 years.
“It’s still a bit of a mystery,” said Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong. Regarding fraudulent invoices, “the fact that the ratio is like that would suggest that some of that is still going on,” he said.
This Bloomberg story, filed from Beijing, was posted on their Internet site at 2:47 a.m. Denver time on Tuesday morning---and it's another article I found embedded in yesterday's edition of the King Report.
Japan's June industrial output fell at the fastest rate since the earthquake and tsunami of March 2011 as companies slowed production to offset a build-up in inventories, clouding the outlook for the economy.
The 3.3 percent month-on-month drop far exceeded the median 1.2 percent fall forecast in a Reuters poll of economists, and followed a 0.7 percent increase in May, data from the Ministry of Economy, Trade and Industry (METI) showed on Wednesday.
In unusually frank language, a METI spokesman said the data showed shipments of goods fell for five consecutive months - a pattern similar to the last time Japan was in recession in the middle quarters of 2012.
The data and the METI official's comments suggest the economy may struggle to rebound in the current quarter following an expected contraction in the second quarter from the sales tax hike, with a Reuters poll conducted in July projecting a 1.4 percent quarterly drop.
This Reuters story, filed from Tokyo, showed up on their website just after midnight EDT on Tuesday, July 30---and I credit the King Report for this story as well. It's worth reading.
Standard & Poor’s declared Argentina in default after the government missed a deadline for paying interest on $13 billion of restructured bonds.
The South American country failed to get the $539 million payment to bondholders after a U.S. judge ruled that the money couldn’t be distributed unless a group of hedge funds holding defaulted debt also got paid. Argentina, in default for the second time in 13 years, has about $200 billion in foreign-currency debt, including $30 billion of restructured bonds, according to S&P.
Argentina and the hedge funds, led by billionaire Paul Singer’s Elliott Management Corp., failed to reach agreement in talks today in New York, according to the court-appointed mediator in the case, Daniel Pollack. In a press conference after the talks ended, Argentine Economy Minister Axel Kicillof described the group of creditors as “vulture funds” and said the country wouldn’t sign an accord under “extortion.”
This Bloomberg news item, co-filed from Buenos Aires and New York, appeared on their website at 8:10 p.m. MDT yesterday evening---and I thank Howard Wiener for bringing it to my attention---and now to yours.
The meeting between Argentine private bank representatives and the so called “vulture funds” over the debt held by the hedge funds has been adjourned and will be resumed on Thursday.
Ámbito.com has revealed that banks will contribute around 1.4 billion dollars in order to buy the titles from the holdouts investors, which means that Argentina will avoid falling into default for any substantial period of time.
Banks offered to pay 250 million dollars upfront and the rest in several payments. Hedge funds appear to have accepted the initiative, but requested the money to be paid fully at once.
Negotiations will continue tomorrow, top sources told Ambito.com.
Here's the view from Argentina on the same issue---and the above four paragraphs are all there is. This was posted on the Buenos Aires Herald website yesterday sometime---and it's also courtesy of Howard Wiener.
1. KWN Commentary: "Billionaire Paul Singer Warns of Major Social Unrest in U.S." 2. Victor Sperandeo: "Legend Warns Unknown Event May Trigger Avalanche of Selling" 3. Andrew Huszar: "Man Who Executed QE1 for Fed Warns Major Turmoil is Coming"
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
For his Internet radio program, "Turning Hard Times into Good Times," newsletter writer Jay Taylor interviewed GATA's secretary/treasurer and mining executive---and financial consultant and market analyst David Jensen about gold and silver price suppression. The interview with Chris Powell is 21 minutes long---and the interview with David Jensen is 28 minutes long. They can be heard at Taylor's Internet site jaytaylormedia.com.
Gold has few friends and so it has gone into hiding on the eve of a new dark age, Hugo Salinas Price writes.
But, he adds, gold and silver will never lose their attraction to people.
His commentary is headlined "Welcome to the New Dark Age" and it's posted at the 24hgold.com Internet site. I thank Chris Powell for wordsmithing 'all of the above'---but reader U.D. was the first person through the door with this story in the wee hours of yesterday morning. It doesn't make for happy reading, but it's a must read nonetheless.
Russia obviously believes in gold – as seemingly does China, the other modern day superpower. Does the West believe in it any longer? It’s hard to tell. On the face of things no. But who knows what is said behind closed doors except those directly involved – and they aren’t saying.
Thus it is still perhaps a good idea to hedge one’s bets and hold some gold against yet another global financial crisis precipitated by tit for tat sanctions. Particularly when one is aware that today’s fiat currencies have virtually no backing at all and could revert to the value of the paper on which they are printed.
Let’s hope it doesn’t happen, but it may be better to be safe than sorry.
This excellent commentary by Lawrie was posted on the mineweb.com Internet site yesterday---and it's certainly worth reading.
More than a third of U.S. adults have bad debt that has been handed over to a collection agency and their average debt in collections is $5,178, according to a study published on Tuesday by the Urban Institute.
The authors of the report by the Washington, D.C.-based think tank said vicious cycles of bad debt can hold back families and entire communities.
"Most people wouldn't blink if told that the majority of Americans carry some debt. But they would be shocked to learn that reported debt in collections is pervasive and threads through nearly all communities," said Caroline Ratcliffe, a senior fellow at the Urban Institute. "Delinquent debt can harm credit scores, which can tip employers' hiring decisions, restrict access to mortgages and even increase insurance costs."
This very interesting Reuters story, filed from Chicago, appeared on their Internet site at 1:43 p.m. EDT on Tuesday afternoon---and I thank reader Harry Grant for sliding today's first story into my in-box in the wee hours of this morning.
Home ownership in the United States fell again in the second quarter to the lowest level since the third quarter of 1995, suggesting many Americans are becoming renters. The seasonally adjusted home ownership rate fell to a seasonally adjusted 64.8% from 65.0% in the first quarter, the Commerce Department said Tuesday.
The residential rental vacancy rate dropped to 7.5% in the second quarter, the lowest level since 1997 and well below the peak of 11.1% in 2009.The increased demand to rent is driving prices higher. In the second quarter, the median asking monthly rent was $756, up from $735 one year ago. In another closely-watched sector, the home ownership rate among those under 35 was 35.9% in the second quarter, down from 36.7% one year earlier. Many analysts say the housing sector will remain weak until first-time buyers return to the market.
That's all there is to this tiny news item that was posted on the marketwatch.com Internet site at 10:27 a.m. EDT on Tuesday morning---and I thank Washington state reader S.A. for sharing it with us.
One of the unwritten rules of modern central banking is that, unless compelled by events on the ground, officials should refrain from making big policy changes during the summer. With many traders on holiday, any sudden moves risk destabilizing markets.
Look for the Federal Reserve to abide by this rule when it meets Tuesday and Wednesday — and the European Central Bank to do the same in early August. Janet Yellen and her colleagues on the policy-making Federal Open Market Committee will maintain their well-telegraphed, gradualist approach, reducing monthly bond purchases by another $10 billion, signaling no urgency in raising interest rates, and reminding us of the importance of looking beyond the unemployment rate to understand what's happening in the job market.
Still, behind this comforting “steady as she goes” facade, Fed officials will be dealing with five complex and inter-related issues, the resolution of which will be months in the making:
This commentary appeared on the moneynews.com Internet site at 8:21 a.m. EDT on Tuesday morning---and it's courtesy of West Virginia reader Elliot Simon.
While we are busy arguing whether the Fed’s exit will consist of rising rates, reverse repos or the trimming of its massive portfolio, the Fed may well be fooling all of us. Investors must have been swallowing lots of blue pills not to see the illusion hiding in plain sight.
Let’s assume that we will indeed get a rate hike next year, and that the Fed will have figured out how to implement it. We may get our exit all right, but it’s not the sort of exit most appear to be expecting. That’s because in our humble view, an “exit” ought to reflect a path towards normalization, away from financial repression, back to an environment where pensioners might once again be able to live off income generated from their savings.
If anyone dares to take a red pill, you will learn that interest rates net of inflation, i.e. real interest rates, have not only continued to be negative, but become more negative of late, meaning inflation has started to inch upward. For normalization to occur, interest rates must move higher faster than the pace of inflation; and not only do real interest rates need to move higher, they ought to move into positive territory to suggest we might be exiting financial repression.
This longish commentary is the second one in a row from the moneynews.com Internet site---and the second in a row from Elliot Simon. It was posted there at 10:54 a.m. EDT yesterday.
In 2012, Wall Street Journal reporter, Scott Patterson, released his 354-page prescient overview of U.S. market structure titled, Dark Pools: High Speed Traders, A.I. Bandits, and the Threat to the Global Financial System. (For those whose computer prowess is limited to turning on a laptop, like millions of fellow Americans, “A.I.” means artificial intelligence – machines teaching themselves to think like humans, but faster.)
Patterson comes to an epiphany on page 339 of his book, writing in the notes section: “The title of this book doesn’t entirely refer to what is technically known in the financial industry as a ‘dark pool.’ Narrowly defined, dark pool refers to a trading venue that masks buy and sell orders from the public market. Rather, I argue in this book that the entire United States stock market has become one vast dark pool. Orders are hidden in every part of the market. And the complex algorithm AI-based trading systems that control the ebb and flow of the market are cloaked in secrecy. Investors – and our esteemed regulators – are entirely in the dark because the market is dark.”
This short essay was posted on the wallstreetonparade.com Internet site yesterday---and I thank reader U.D. for passing it around.
JPMorgan Chase will pay $650,000 to settle charges by federal regulators that it filed inaccurate reports on the trading positions of some of its large customers.
The Commodity Futures Trading Commission announced the settlement Tuesday. The CFTC said that JPMorgan continued to submit inaccurate reports to the agency from 2012 through February of this year even though CFTC staff found errors in them and notified JPMorgan.
The New York bank neither admitted nor denied wrongdoing in the settlement. It agreed to certify in writing that it has improved and tested its procedures for filing reports. A company spokesman declined to comment.
Coffee money---and certainly not big enough to be a licensing fee. Ted said that they were fined for misreporting large traders in the futures and options market on the Comex, but the commodities affected weren't mentioned. This article showed up on The New York Times website on Tuesday sometime---and it's courtesy of reader Phil Barlett.
UBS has reached a settlement with the authorities in Germany over helping clients evade taxes. The Swiss bank will pay €300 million (CHF364.4 million) in the agreement marking another step in the bank’s resolving the problems of its past.
UBS revealed it had settled the investigation in July while reporting its second quarter earnings on Tuesday.
The bank said it had entered CHF120 million ($132 million) in provisions in connection with the German settlement in its second quarter results, where it posted a net profit of CHF792 million.
This article was posted on the swissinfo.ch Internet site at 10:50 a.m. Europe time on their Tuesday morning---and I thank South African reader B.V. for sharing it with us.
1. Coordinated Sanctions Aim at Russia’s Ability to Tap Its Oil Reserves: The New York Times 2. U.S., Europe impose tough new sanctions on Russia: The Washington Post 3. E.U. and U.S. impose new round of sanctions on Russia over Ukraine: Russia Today 3. Sanctions Against Russia May Have Severe Impact on Global Economy - IMF: RIA Novosti
[The above stories are courtesy of Elliot Simon and Roy Stephens]
The Permanent Court of Arbitration in The Hague has thrown the book at the Russian state, or more specifically at Vladimir Putin and his Siloviki circle from the security services.
The $51.5bn ruling against on the Kremlin unveiled this morning has no precedent in international law. The damages are 20 times larger than any previous verdict.
Lawyers for the Yukos-MGL-Khodorkovsky team tell me that they cannot pursue the foreign bond holdings of the Russian central bank if the Kremlin refuses to pay up when the deadline expires on January 15, as seems likely. Moscow has already dismissed the case as “politically motivated”.
Nor can they go after embassies and other sovereign assets that enjoy diplomatic immunity, though they are eyeing a list of Russian state targets that slipped through the net.
This Ambrose Evans-Pritchard blog appeared on the telegraph.co.uk Internet site on Monday sometime---and my thanks go out to Roy Stephens for finding it for us.
Dutch Prime Minister Mark Rutte has called on Kiev authorities to stop its military operation against independence supporters around the Malaysia Airlines flight MH17 crash site in eastern Ukraine, Agence France-Presse reported Tuesday, citing a government representative.
"The prime minister this morning called the Ukrainian president with a request to halt hostilities around the crash site," Jean Fransman said.
Ukrainian President Petro Poroshenko told Rutte that he would take all measures “to allow investigators access” to the scene, according to the government spokesman.
"Rutte expressed his concern about the fact it appeared the investigators may today yet again not reach the site. This is important because we want to get to the crash site as quickly as possible to get the victims and bring them home," Fransman said.
This article, filed from Moscow, was posted on the RIA Novosti website at 5:07 p.m. Moscow time on their Tuesday afternoon, which was 9:07 a.m. in New York.
In the past two days Kiev’s forces have launched several short-range ballistic missiles into areas in east Ukraine controlled by self-defense forces, CNN reports, citing U.S. government sources.
The move “marks a major escalation” in the Ukrainian crisis, CNN said.
“Three U.S. officials confirmed to me a short time ago that U.S. intelligence over the last 48 hours has monitored the firing of several short-range ballistic missiles from territory controlled by Ukraine government forces into areas controlled by the pro-Russian separatists,” Barbara Starr, CNN’s Pentagon correspondent, said in a live report.
Short-range ballistic missiles can carry warheads of up to 1,000 pounds (450 kg) and are capable of killing dozens of people at a time, Starr said.
This news item put in an appearance on the Russia Today Internet site at 6:07 p.m. on Tuesday evening Moscow time---and once again I thank Roy Stephens for sending it.
Two days of shelling in Gorlovka, in the Donetsk region of Eastern Ukraine, have resulted in 31 civilians being killed there, local authorities say. Ukrainian troops and anti-government forces are blaming each other for the bloodshed.
The town of Gorlovka witnessed more shelling Tuesday morning, RIA Novosti news agency reported.
“Over the past 24 hours 17 residents of Gorlovka, including three children, have been killed in the center of the town, which got under artillery fire. 43 civilians have been wounded,” Itar-Tass reported the press service of the Gorlovka city administration as saying.
This is another Russia Today news item---and it's also courtesy of Roy Stephens. It appeared on their website at 2:09 p.m. Moscow time on their Tuesday afternoon.
More than 48,000 Ukrainian citizens have already applied for refugee status in Russia, the Russian Emergencies Ministry press office said Tuesday.
“To date … over 48,000 Ukrainian citizens have asked for temporary accommodation and refugee status, over 27,000 [refugees] have applied for Russian citizenship,” the ministry reported.
Earlier on Tuesday, Russia's children's rights ombudsman Pavel Astakhov reported that more than 230,000 Ukrainians have been granted refugee status in Russia.
This is developing into a human tragedy of biblical proportions. This RIA Novosti article was posted on their website at 11:49 p.m. Moscow time Tuesday evening---and it's worth reading. I thank Roy Stephens for sending it.
Russian President Vladimir Putin promised Tuesday to help in evacuating children who require urgent medical assistance from violence-hit eastern Ukraine.
The head of the presidential human rights council, Mikhail Fedotov, told Putin at a meeting that the Kiev government keeps silent on Russia’s offer to evacuate the children.
“I expect that we will be able to agree with human rights activists and Ukrainian authorities,” Putin said. “We will try to help.”
The Russian leader added: “This is an important humanitarian sphere and I would ask you to seek the response of the Ukrainian colleagues in a non-conflict manner.”
This commentary appeared on the RIA Novosti Internet site at 5 p.m. Moscow time on their Tuesday afternoon. It's another contribution from Roy Stephens.
Imperial Washington is truly running amuck in its insensible confrontation with Vladimir Putin. The pending round of new sanctions is a counter-productive joke. Apparently, more of Vlad’s posse will be put on double probation, thereby reducing demand for Harry Macklowe’s swell new $60 million apartment units on Park Avenue. Likewise, American exporters of high tech oilfield equipment will be shot in the foot with an embargo; and debt-saturated Russian state companies will be denied the opportunity to bury themselves even deeper in dollar debt by borrowing on the New York bond market. Some real wet noodles, these!
But it is the larger narrative that is so blatantly offensive—that is, the notion that a sovereign state is being wantonly violated by an aggressive neighbor arming “terrorists” inside its borders. Obama’s deputy national security advisor, Tony Blanken, stated that specious meme in stark form yesterday:
“Russia bears responsibility for everything that’s going on in Eastern Ukraine” and “has the ability to actually de-escalate this crisis,” Blinken said.
Puleese! The Kiev government is a dysfunctional, bankrupt usurper that is deploying western taxpayer money to wage a vicious war on several million Russian-speaking citizens in the Donbas—-the traditional center of greater Russia’s coal, steel and industrial infrastructure. It is geographically part of present day Ukraine by historical happenstance. For better or worse, it was Stalin who financed its forced draft industrialization during the 1930s; populated it with Russian speakers to insure political reliability; and expelled the Nazi occupiers at immeasurable cost in blood and treasure during WWII. Indeed, the Donbas and Russia have been Siamese twins economically and politically not merely for decades, but centuries.
This absolute must read essay by David Stockman was posted on his website yesterday---and as Roy Stephens said in his covering e-mail---"it is the most articulate and accurate summary of the Ukraine situation that I have read to date!" I agree totally.
Turkish Prime Minister Tayyip Erdogan says he will gladly return an award given to him by a Jewish-American association a decade ago in a letter released by his office, which also called on the US group to condemn Israel’s government policies in Gaza.
The New York-based American Jewish Congress said in a letter to Erdogan last week that he had become the world's "most virulent anti-Israeli leader" and it demanded that he return the prize. He had been given the award partly for his efforts to broker peace between Israel and the Palestinians 10 years ago.
"Prime Minister Erdogan will be glad to return the award given back in 2004," Turkey's ambassador to Washington Serdar Kilic said in the letter addressed to American Jewish Congress President Jack Rosen.
This news item showed up on the Russia Today website at 3:24 p.m. Moscow time on Tuesday afternoon---and is another contribution from Roy Stephens.
A Chinese industry and commerce agency confirmed Tuesday it is probing US software giant Microsoft for allegedly operating a monopoly, according to The China Post.
“According to legal regulations, the SAIC (State Administration for Industry and Commerce) has set up a case to investigate Microsoft for alleged monopoly actions,” the Chinese paper quoted the regulator as saying in a statement.
The inquiry came two month after China banned the use of the company’s Windows 8 operating system on government computers, citing security concerns. Up to 95 percent of operating system software in the country stems from Microsoft.
This RIA Novosti story, filed from Moscow, showed up on their website at 10:0 p.m. yesterday evening local time. I thank reader B.V. for his second contribution to today's column.
By defaulting today, Argentina may trigger bondholder claims of as much as $29 billion -- equal to all its foreign-currency reserves.
If the overdue interest on Argentina’s dollar-denominated securities due 2033 isn’t paid by July 30, provisions in bond indentures known as cross-default clauses would allow the nation’s other debt holders to also demand their money back immediately. The amount corresponds to Argentina’s debt issued in foreign currencies and governed by international laws.
U.S. District Court Judge Thomas Griesa blocked Argentina’s attempt last month to transfer the $539 million in interest after the nation didn’t set aside money for holdout creditors, who won a ruling that entitled them to full repayment of obligations that Argentina repudiated in 2001. While Citigroup Inc. says there’s little chance investors will invoke the pay-back clauses in coming weeks, potential claims are large enough to exhaust the country’s reserves.
This news item appeared on the Bloomberg website at 11:24 a.m. Denver time on Tuesday---and I thank Roy Stephens for his final contribution to today's column.
1. Dr. Stephen Leeb: "This Will End in Tears For the West as Gold and Silver Soar" 2. Rick Rule: "Silver is the Wild Card as Metals to Surge Higher" 3. Grant Williams: "Black Swan to Engulf the World in Catastrophe"
[Please direct any questions or comments about what is said in these interviews by either Eric King or his guests to them, and not to me. Thank you. - Ed]
Goldman Sachs Group Inc's metals warehousing unit is exploring its first foray into China, and privately held C Steinweg has expanded capacity there, sources said, as a financing scandal in a major Chinese port fuels a scramble for market share.
The alleged scam - in which a Chinese trading firm is suspected by local authorities of fraudulently using a single cargo of metal as collateral for multiple loans - has shaken the confidence of banks and merchants in Western metals storage firms that rely on local agents to oversee warehouse operations.
It has intensified a battle between new entrants and entrenched rivals in the multi-billion dollar business of securely storing the world's commodities in China, the world's biggest producer and user of base metals.
This longish Reuters article, co-filed from New York, Sydney and London, was posted on their Internet site at 1:52 p.m. EDT on Tuesday---and I thank Harry Grant for finding it for us.
The conundrum that is the gold price continues to confound. Last year the gold price dropped dramatically despite an enormous level of ongoing gold flows from West to East – particularly into China. Yet yesterday the reports of the lowest monthly level of net gold imports from Hong Kong into mainland China since January 2013 was followed by the gold price putting on something of a surge – it having been driven down to around the $1,290 level during the week, but then shooting up to comfortably above $1,300 in late trading Friday.
On the face of things the latest gold import figures via Hong Kong certainly suggest a sharp downturn in Chinese demand, which started to kick in after some exceedingly strong import figures around the Chinese New Year. As the table above shows import figures for the four months from March to June are very substantially below those of a year earlier – and overall, for the first six months of the year net imports via Hong Kong are down by 12% - but the trend is rather worse than that figure might suggest with the March to June period net imports down a massive 42%.
The decline in imports via Hong Kong is indeed an indication of falling Chinese demand so far this year and is supported by other data – notably the Chinese Gold Association’s recent announcement stating that Chinese gold demand in the first half of the year was down 19.4% year on year to 569.45 tonnes, compared with 706.36 tonnes a year earlier. Thus the latest Hong Kong figures may not be indicative of the true fall in demand any more.
This commentary by Lawrie was posted on the mineweb.com Internet site on Saturday---and it's worth reading.
Sometimes I see an important economic or geopolitical event in screaming headlines and think: “That’s bullish for gold.” Or: “That’s bad news for copper.” But then metals prices move in the opposite direction from the one I was expecting. Doug Casey always tells us not to worry about the short-term fluctuations, but it’s still frustrating, and I find myself wondering why the price moved the way it did.
As investors we’re all affected by surges and sell-offs in the investments that we own, so I want to understand. Take gold, for example. Oftentimes we find that it seems to tease us with a nice run-up, only to give a big chunk of the gains back the next week. And so it goes, up and down…
The truth is—and it really is this simple, but so obvious that people forget—that there are always rallies and corrections. The timing is rarely predictable, but big market swings within the longer-term megatrends we’re speculating on are normal in our sector.
This commentary by Casey Research analyst Laurynas Vegys was posted on their website yesterday.
BGG: Precious Metals. And I just wanted to sit down with you and ask you a little bit about the future of gold and the markets. You famously predicted the crash of 2008, 2009, and I loved watching your interviews on television where they would just laugh at you, and just ridicule you, but in the end you had the last laugh.
Peter Schiff: Not yet. Not even yet. Because the people that were ridiculing me back then are still ridiculing me, because I’m still warning that the real crisis hasn’t even happened yet. Because everything that the Federal Reserve has done, everything that the government has done since the financial crisis of ’08 has just made the problems that they were trying to solve worse. Problems that they caused.
BGG: They’ve learned nothing. They’ve learned absolutely nothing because they don’t understand what caused it.
Peter Schiff: No, they still don’t understand even after the fact. So we’re going to live through a worse financial crisis. Next time I think it’s going to be a dollar crisis, which is going to be much more painful than a banking crisis. And in that environment gold is going to shine a lot brighter than it did in the last crisis. And so the reasons to own it now are even more numerous than they were then.
There's a 13:11 minute audio interview, or you can read the transcript. It was posted on the birchgold.com Internet site on Monday.
Comex gold market data is likely corrupted to facilitate the paper gold market's domination of the physical gold market, Sprott Asset Management CEO Eric Sprott remarks in his latest interview with Sprott Money News.
Sprott praises GATA's work exposing gold market manipulation, cites GATA consultant Dimitri Speck's book "The Gold Cartel," and says he sees no need for a daily silver price-fixing mechanism. The interview is 24 minutes long but if you can read faster than you can listen, a full transcript is posted with the audio at the Sprott Money Internet site.
I thank Chris Powell for providing the above paragraphs of introduction.
The banks that conduct the century-old gold fixing and the London Bullion Market Association will seek proposals next month for a new administrator to run a revamped process for the benchmark by year-end.
The London Gold Market Fixing Ltd., which manages the procedure, and the LBMA will open a market consultation in late August and plan to announce a third-party administrator by the end of September, the association said in a statement today. The process will be open and not restricted to firms who pitched to run a mechanism that will replace the silver fixing on August 15.
The gold fixing company said July 16 that the LBMA will help with a request-for-proposals exercise and that it’s seeking an independent chairman for the price-setting ritual that takes place twice a day by phone. A similar process for silver will be replaced by an electronic, auction-based mechanism run by CME Group Inc. and Thomson Reuters Corp. next month after Deutsche Bank AG’s planned withdrawal would leave just two banks to conduct fixings for that commodity.
This Bloomberg article, filed from London, was posted on their website at 12:09 p.m. MDT yesterday---and I found it embedded in a GATA release.
"The central bank imposed interest rates are the source of global financial instability now and in the future," warns Grant's Interest Rate Observer's Jim Grant, adding that "The Fed... has manipulated us into a period of quite eerie stability and measured volatility."
Grant believes, given the values (and aware of the risks) that Russian "stocks stand to do very well," and also likes mining stocks as he warns credit markets are overvalued (especially sovereign debt). His conclusion, own gold as "it stands to benefit from the demonstrated, as opposed the theoretically likely, crack up of the [current] monetary arrangements."
Gold, he explains, "is the ultimate inoculation against the harebrained doctrine of modern central bankers."
This 2:34 minute video clip was embedded in a Zero Hedge piece from yesterday, but the video clip itself was M.I.A. inside the ZH piece, so I've posted it on its own. I thank both Phil Barlett and Elliot Simon for bringing this story/video clip to our attention.
Following last week's collapse in new home sales (and last month's massive beat and surge in pending home sales), it was likely not a total surprise that pending home sales would slow, but the -1.1% MoM print is the worst in 2014 (and the biggest miss in 2014). The median existing home price continues to rise (up 4.3% year-over-year) but this is the slowest rate of gain since March 2012. NAR is quick with the excuses and this time.. no weather is to blame.
Lawrence Yun, NAR chief economist, says the housing market is stabilizing, but ongoing challenges are impeding full sales potential. “Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved,” he said. “However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates.”
Yun forecasts existing-homes sales to be down 2.8 percent this year to 4.95 million, compared to 5.1 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and in 2015.
This worthwhile read, which includes a couple of excellent charts, was posted on the Zero Hedge website site at 10:06 a.m. EDT Monday morning---and I thank reader M.A. for today's first story.
New home sales plunged 8.1 percent in June, putting the decline at 4.9 percent for the first half of the year, and that's not good news for the economy.
"Housing has clearly been a notable area of persistent sluggishness beyond early-year weather disruptions," Ted Wieseman, an economist at Morgan Stanley, told The Wall Street Journal.
The economy contracted 2.9 percent in the first quarter, though many analysts expect it to grow nearly 3 percent for the rest of the year.
Home sales have suffered from buyers' lingering fear after last decade's housing bust, the sharp rise of home prices last year and the surge of student-loan debt, John Burns, CEO of John Burns Real Estate Consulting, told The Journal.
I believe I posted a story about this on Friday or Saturday, but this moneynews.com story from Sunday courtesy of West Virginia reader Elliot Simon, sort of fit here, so you can read about now if you missed it last week.
Economic inequality in the United States has been receiving a lot of attention. But it’s not merely an issue of the rich getting richer. The typical American household has been getting poorer, too.
The inflation-adjusted net worth for the typical household was $87,992 in 2003. Ten years later, it was only $56,335, or a 36 percent decline, according to a study financed by the Russell Sage Foundation. Those are the figures for a household at the median point in the wealth distribution — the level at which there are an equal number of households whose worth is higher and lower. But during the same period, the net worth of wealthy households increased substantially.
The Russell Sage study also examined net worth at the 95th percentile. (For households at that level, 95 percent of the population had less wealth.) It found that for this well-do-do slice of the population, household net worth increased 14 percent over the same 10 years. Other research, by economists like Edward Wolff at New York University, has shown even greater gains in wealth for the richest 1 percent of households.
This article appeared on The New York Times website on Saturday sometime---and it's the second contribution in a row from Elliot Simon.
John Hussman can generally be counted on for a bearish take on the stock market. But his latest weekly commentary letter is a doozy, with some particularly pointed remarks aimed at investors who continue to believe valuations are fair in stocks.
The economist runs Hussman Funds, and since the financial crisis he’s been a prominent critic of Federal Reserve policy. His investment choices are concentrated in “defensive” positions in stocks and U.S. Treasurys. And if you take a look at his writing, it’s no secret why. Here’s the money quote from the latest commentary:
“Make no mistake – this is an equity bubble, and a highly advanced one. On the most historically reliable measures, it is easily beyond 1972 and 1987, beyond 1929 and 2007, and is now within about 15% of the 2000 extreme. The main difference between the current episode and that of 2000 is that the 2000 bubble was strikingly obvious in technology, whereas the present one is diffused across all sectors in a way that makes valuations for most stocks actually worse than in 2000. “
This news item showed up on the marketwatch.com Internet site at 3:58 p.m. EDT on Sunday afternoon---and it's the first offering of the day from Roy Stephens.
Permabear Marc Faber said Monday he expects stocks to drop 20 percent 30 percent by October.
"Don't forget many stocks are already down 10 percent. The home builders are down roughly 15 percent. Airlines have just dropped around 10 percent," he said on CNBC's "Halftime Report."
Faber, publisher of the "Gloom, Boom & Doom Report," also noted that several large-cap stocks were down by double-digit percentages.
"So, we're not exactly in a uniformly strong market," he said. "The Russell 2000, which represents 2,000 companies, is down 2 percent for the year. And big deal, the S&P is up 6 percent, whereas the Philippines, Indonesia, India, Thailand, Vietnam are all up between 15 percent and 25 percent."
This 2:55 minute CNBC video clip showed up on their website around 11 a.m. EDT on Monday---and I thank reader Ken Hurt for sending it our way.
Jamie Dimon, the chief executive of JPMorgan Chase, recently said, “I love America.” Lloyd Blankfein, the chief executive of Goldman Sachs, wrote an opinion article saying, “Investing in America still produces the best return.”
Yet guess who’s behind the recent spate of merger deals in which major United States corporations have renounced their citizenship in search of a lower tax bill? Wall Street banks, led by JPMorgan Chase and Goldman Sachs.
Investment banks are estimated to have collected, or will soon collect, nearly $1 billion in fees over the last three years advising and persuading American companies to move the address of their headquarters abroad (without actually moving). With seven- and eight-figure fees up for grabs, Wall Street bankers — and lawyers, consultants and accountants — have been promoting such deals, known as inversions, to some of the biggest companies in the country, including the American drug giant Pfizer.
This article appeared on The New York Times website at 9:02 p.m. EDT last night---and I thank Phil Barlett for sharing it with us.
Investor ratings service Moody’s has changed its outlook for Canada’s biggest banks to negative from stable, citing concerns over the Canadian government’s plan to implement a “bail-in” system in the event of a bank failure.
The “bail-in” rule, included as part of the 2013 omnibus budget bill, asserts that the federal government would not necessarily bail out a bank on the brink of failure with taxpayer money.
Instead bank bondholders would be expected to assume the risk, though there is no guarantee that deposit-holders would not be hurt if they had more money in the bank than the $100,000 guaranteed by CDIC.
Canada has yet to set parameters for how a bail-in might work. Mark Carney, who was Bank of Canada governor at the time, said last April it was 'hard to fathom' a scenario where Canadians' deposits would be touched, as happened in the Cyprus bank failure.
This news item appeared on the cbc.ca Internet site way back on July 8, but for all Canadian citizens, it's still worth reading. I thank reader Dave Malek for bringing it to our attention.
Argentina will send a negotiation team to New York today for further talks with a US court-appointed mediator Daniel Pollack in its debt dispute with "holdout" investors, Cabinet Chief Jorge Capitanich said earlier, with just three days left to avert a default. In a statement released today, Pollack confirmed he will be receiving the Argentine delegation at his office tomorrow at 12 pm (Argentina time) and he "urged direct, face-to-face conversations with the Bondholders, but that will not happen tomorrow."
Argentina has until Wednesday to either pay the New York hedge funds suing for full repayment on their bonds or reach a deal.
Otherwise, barring a suspension of the court-ordered July 30 deadline, Argentina will default for the second time in 12 years.
Here's an update on Argentina's bond situation. This article was posted on the Buenos Aires Herald website yesterday sometime---and I thank reader M.A. for sending it our way.
That will teach them!
Having received full credit for for co-operation and suspending some individuals, Lloyds Bank has been fined by the CFTC the staggeringly wrist-slap-like sum of $105 million for the "manipulation, attempted manipulation, and false reporting of Libor."
Total fines will amount to around $370 million across all UK and US regulators and all Lloyds divisions.
As the WSJ reports, the British bank becomes the seventh financial institution to strike a deal with U.S. and U.K. authorities who are conducting a long running probe into allegations of widespread attempts to manipulate Libor. With no less than the head of the Bank of England calling the bank's actions (manipulating JPY Libor for at least 2 years) "reprehensible," and the CFTC adds individuals behavior was a "gross breach of trust." Well we are sure after this they will never manipulate another market ever again.
Another licensing fee---and nobody is going to jail. This Zero Hedge news item appeared on their website at 9:04 a.m. EDT on Monday morning---and I stole the headline from a GATA release, but the story itself is courtesy of reader M.A. There's also a Reuters story about this linked here.
The IMF has warned that the pound is overvalued by 5pc-10p, in an update of its wide-ranging annual assessment of Britain's economy.
After depreciating by 23pc between 2007 and 2009, the real exchange rate has gradually appreciated, and this trend accelerated from the middle of 2013, the fund said, as it praised the Bank of England for keeping interest rates low and welcomed signs that Britain's surprisingly strong economic recovery is broadening.
A high pound could affect the rebalancing of the economy, according to the staff report. A strong currency depresses domestic demand and encourages spending on imports.
"Further demand rebalancing is needed: net trade has made only a modest contribution to the recovery, and the real exchange rate is moderately overvalued," the report said on Monday.
This news item was posted on The Telegraph's website at 4:58 p.m. BST on their Monday afternoon---and I thank South African reader B.V. for sharing it with us.
The International Monetary Fund has said U.K. interest rates should stay low for now, but the Bank of England policymakers must be ready to raise them should other measures fail to keep the housing market in check.
The IMF said that so-called macro-prudential measures should be the "first line of defence" against financial stability risks from the housing market. But ultimately more must be done to raise the supply of housing to meet demand, it said, echoing warnings from economists and the Bank of England's governor, Mark Carney.
The Washington-based IMF also warned of a check to George Osborne's ambitions to rebalance the economy towards manufacturing, as it warned that sterling was "moderately overvalued", while net trade has not been a strong factor in the economic recovery.
This article appeared on theguardian.com Internet site at 5:50 p.m. BST yesterday---and in some respects is similar to the story from The Telegraph that precedes it. This is the second offering of the day from Roy Stephens.
1. Putin facing multi-million pound legal action over alleged role in MH17 crash: The Telegraph 2. U.S. Indirectly Admits Ukraine’s Missile Systems Present near Donetsk when MH17 Crashed: RIA Novosti 3. MH17 probe shows crash caused by 'massive explosive decompression': The Telegraph 4. Kiev says rocket blast downed MH17, Dutch probe says info ‘premature’: Russia Today
[All of the above stories are courtesy of Roy Stephens]
Russian Foreign Minister Sergei Lavrov reproached western countries Monday for their lack of political proposals to resolve the crisis in Ukraine, saying they are merely making demands of Russia and threatening sanctions.
“I have neither seen nor heard of any political initiatives from our western colleagues,” Lavrov told journalists.
“There were the Berlin agreements, now there are the agreements promoted within the OSCE. I want to ask our Western colleagues what their contribution to a political resolution is,” Lavrov said, criticizing the leaders for refusing to support the agreements made in the UN Security Council and the Organization for Security and Co-operation in Europe.
Lavrov said Russia’s western partners only say that Moscow needs to change its policy toward Ukraine.
This RIA Novosti news item, filed from Moscow, appeared on their website at 2:15 p.m. Moscow time on Monday, which is 6:15 a.m. EDT. It's another offering from Roy Stephens.
Russia’s Defense Ministry has stated that “fake” satellite images of alleged shelling of Ukraine from Russian territory were created by U.S. counselors “with close links to Ukraine’s Security Council.”
The authenticity of the images is impossible to prove, the ministry added.
The Defense Ministry stated that the images posted by the U.S. ambassador Geoffrey Pyatt on his Twitter account, allegedly proving the shelling of Ukraine from Russian territory, are “fake,” ITAR-TASS reports.
“These materials were posted to Twitter not by accident, as their authenticity is impossible to prove – due to the absence of the attribution to the exact area, and an extremely low resolution. Let alone using them as ‘photographic evidence’,” Igor Konashenkov, the official representative of the ministry, stated.
This Russia Today story appeared on their website at 11:29 a.m. Moscow time yesterday morning---and it's also courtesy of Roy Stephens.
More than 40 Ukrainian soldiers have abandoned their military posts and crossed into Russian territory, stating that they refuse to fight against their own people, a Russian Federal Security Service spokesperson said.
At least 41 Ukrainian soldiers have made it to Russian territory after asking self-defense forces for help, the spokesperson from the Federal Security Service’s Rostov region border patrol unit, Vasily Malaev, told Itar-Tass.
"At around 20:30 Moscow time, 41 Ukrainian soldiers left their military bases and arrived at the Ukrainian border crossing checkpoint Izvarino. They appealed to the militia there for help to with cross into the Russian territory, in connection with the fact that they do not want to fight against their own people,” Malaev said.
All of the soldiers were able to cross into Russia at the Donetsk checkpoint, the spokesperson added.
This story appeared on the Russia Today Internet site at 2:00 a.m. Moscow time on their Sunday morning, which was 6 p.m. in New York on Saturday evening. I thank Roy Stephens for sending it.
1. West agrees wider Russia sanctions as Kiev says forces near crash site: Reuters 2. U.S. and Europe Agree to Escalate Sanctions on Russia: The New York Times 3. Wall Street struggles to comply with new U.S. sanctions on Russia: Reuters 4. Multi-billion losses expected from Russia sanctions: E.U. Observer
[All of the above stories are courtesy of Roy Stephens as well]
Prime Minister Stephen Harper says the western world can’t soften its tough stand toward Russia over the crisis in Ukraine, even at the expense of the economy.
In an unusual move, Harper has written an editorial on the situation in Ukraine that was published in Saturday’s Globe and Mail.
He writes that although militants in eastern Ukraine are referred to as ‘pro-Russian separatists,’ there is no doubt they are “an extension of the “Russian state.”
Harper accuses Russia of “aggressive militarism” that he says is a threat to not only Ukraine, but Europe and the values that bind Western nations.
As a Canadian, I'm totally embarrassed---and this shows you just how much this government has sold itself out to the Americans. Harper can lie his ass off just as well as the rest of the leaders in the West. This short CP article, filed from Toronto, was posted on the vancouversun.com Internet site on Saturday---and it's also courtesy of Roy Stephens.
An international arbitration court ruled on Monday that Russia must pay $50 billion for expropriating the assets of Yukos, the former oil giant whose ex-owner Mikhail Khodorkovsky fell foul of the Kremlin.
Finding that Russian authorities had subjected Yukos to politically-motivated attacks, the panel made an award to a group of former Yukos shareholders that equates to more than half the entire fund Moscow has set aside to cover budget holes.
Russia, whose economy is on the brink of recession, said it would appeal the ruling by the Dutch-based panel, which judges private business disputes. It also said the "politically biased decision" was based on "current events" - an apparent reference to Moscow's dispute with the West over Ukraine.
Independent lawyers said it would be difficult to enforce the award to shareholders in the GML group, who had claimed $114 billion to recover money they lost when the Kremlin seized Yukos a decade ago.
This Reuters article, co-filed from Moscow, London and Amsterdam showed up on their Internet site at 4:38 p.m. EDT on Monday evening---and I thank Elliot Simon for bringing it to our attention.
The United States has concluded that Russia violated a landmark arms control treaty by testing a prohibited ground-launched cruise missile, according to senior American officials, a finding that was conveyed by President Obama to Russian President Vladimir V. Putin in a letter on Monday.
It is the most serious allegation of an arms control treaty violation that the Obama administration has leveled against Russia and adds another dispute to a relationship already burdened by tensions over the Kremlin’s support for separatists in Ukraine and its decision to grant asylum to Edward J. Snowden, the former National Security Agency contractor.
At the heart of the issue is the 1987 treaty that bans medium-range missiles, which are defined as ground-launched ballistic or cruise missiles capable of flying 300 to 3,400 miles. That accord, which was signed by President Ronald Reagan and Mikhail S. Gorbachev, who was then the Soviet leader, helped seal the end of the Cold War and has been regarded as a cornerstone of American and Russian arms control efforts. Obama administration officials concluded by the end of 2011 that the cruise missile test was a compliance concern, officials have said. Rose Gottemoeller, the State Department’s senior arms control official, first raised the violation concern with Russian officials in May 2013.
Surely they jest? Someone's hands must have been shaking when they posted this piece of garbage on The New York Times website on Monday. If this isn't a perfect example of the pot calling the kettle black, I don't know what is. It's also courtesy of Roy Stephens.
The Prime Minister of Bulgaria Plamen Oresharski has resigned his post. His decision came after accusations by opponents of failing to cope with the worst banking crisis in 17 years.
The decision was supported by 180 lawmakers in the parliament, only 8 voted against, and 8 abstained, reports Bloomberg.
The Oresharski government lasted for only 16 months of the 4 years it was elected for. New elections on October 5 will see the country’s fifth prime minister since Bulgaria joined the European Union in 2007.
“My cabinet worked in unprecedented conditions of hostility…Despite that we achieved good results. All business indicators improved in the year we ruled,” Reuters quotes Oresharski’s speech just before the vote.
This story put in an appearance on the Russia Today website at 3:06 p.m. last Friday afternoon Moscow time---and I thank Harry Grant for sending it.
The United States closed its embassy in Libya on Saturday and evacuated the embassy’s staff under military guard, in what the State Department said was a response to escalating violence in the Libyan capital, Tripoli.
Officials called the evacuation “temporary” and said they were looking for ways to reopen the embassy, even as the State Department issued a new travel warning on Saturday, advising United States citizens to leave Libya “immediately.”
Weeks of heavy fighting between rival Libyan militias for control of Tripoli’s international airport had in recent days edged closer to the heavily fortified embassy, which is on the main road to the airport. The clashes have all but destroyed the airport, severely limiting air travel to Libya.
This article appeared on The New York Times website on Saturday sometime---and I think it's worth reading. Once again I thank Roy Stephens for sending it along.
The war in Gaza erupted afresh on Monday as Israel warned of a protracted military campaign to destroy cross-border tunnels and disarm Hamas and other militant groups.
"We need to be prepared for a long operation until our mission is accomplished," Israeli prime minister Binyamin Netanyahu said in a televised press conference, rejecting mounting international calls for an immediate and unconditional ceasefire.
Netanyahu – who described the conflict as a "just war" - spoke after a series of dramatic events following a lull in fighting on Sunday and early Monday. Eight children playing in a park in a Gaza refugee camp were killed, the main public hospital was struck, four Israeli soldiers were killed in a mortar attack and militants from Gaza infiltrated Israel through a tunnel.
This story showed up on theguardian.com Internet site at 7:48 BST on their Monday evening---and it's the final offering of the day from Roy Stephens, for which I thank him.
The Republic has expressed its intention to accept China’s invitation to become a founding member of a new regional bank to fund infrastructure projects in Asia, said Singapore’s Ministry of Foreign Affairs (MFA).
Singapore’s intention was conveyed by Deputy Prime Minister Teo Chee Hean at a meeting in Beijing on Monday (July 28) with Chinese Vice-Premier Zhang Gaoli, who had invited Singapore to be part of the Asian Infrastructure Investment Bank (AIIB).
“Mr Teo and Mr Zhang discussed how the AIIB can complement existing multilateral development banks (MDBs), stay open and inclusive and draw upon the best practices of existing MDBs in terms of governance and operations,” said the MFA in a statement.
This article put in an appearance on the channelnewsasia.com Internet site at 9:54 a.m. Singapore time on their Tuesday morning---and I thank reader M.A. for sliding it into my in-box late last night.
The top one percent of households in China control more than a third of the country's wealth, a study found. As analyst James Rickards tells DW, inequality is becoming so extreme it threatens to cause social disorder.
The findings published in a Peking University report released on July 25, reveal the extent of China's social inequality. "One percent of households at the top level nationwide control more than one third of the country's wealth. Twenty-five percent of families at the bottom level only own one percent of the country's wealth," the website of the People's Daily newspaper reported on the university's statistics. The main reason behind the disparity is said to be the difference between wages in the cities and the rural areas.
The report also included the Gini coefficient, a measure of income distribution with 0 representing total equality and 1 representing total inequality. Government statistics claim the figure stood at 0.47 in 2012, which would put it close to the US, which had an index figure of 0.56 in 2009, according to the World Bank.
James Rickards, a U.S. writer, lawyer and economist, says in a DW interview that China has now surpassed the U.S. in terms of income inequality, adding that both countries are approaching the point where this disparity becomes so extreme that it threatens to cause social disorder.
This very interesting interview was posted on the dw.de Internet site yesterday---and I thank reader Harold Jacobsen for finding it for us.
1. Michael Pento: "Forget the Propaganda, This is What's Really Happening" 2. John Embry: "The Shocking Reason Why Gold May Quickly Hit $2,000" 3. Robert Fitzwilson: "Investors Must Prepare Now For Chaos and Wealth Destruction" 4. Andrew Maguire: "Hundreds of Tons of Gold Bought By East in 14 Days" 5. James Turk: "Expect a Wild Trading Week in the Gold and Silver Markets" 6. Richard Russell: "I'm Afraid We Will See Blood in the Streets" 7. The first audio interview is with Andrew Maguire---and the second audio interview is with Art Cashin
Acknowledging that the usefulness of technical analysis is increasingly doubted as market manipulation intensifies, newsletter writer and technical analyst Tim W. Wood notes today that manipulation is as old as markets themselves and quotes various authorities to the effect that manipulation cannot long defeat any market's "primary trend."
But Wood's authorities all precede the seizure of absolute economic power by the U.S. government, implemented by the Federal Reserve and Treasury Department and Treasury's Exchange Stabilization Fund -- the power to create infinite amounts of money and to trade secretly in any market, power that even former central bankers now acknowledge as "financial repression."
Wood argues that "the very basis of technical analysis is that everything is discounted into price."
Really? So on April 11, 2013, did technical analysis forecast the coordinated and overwhelming attack on the gold market by central banks that would begin on the following day? Does the foresight of technical analysis today really extend into government chancelleries as policies are decided privately and then implemented by intermediaries through various instruments and mechanisms, from derivatives to high-frequency trading?
As you are well aware, dear reader, I have always trashed technical analysis of the precious metal markets for all the reasons given in this story---and that can now be said about the equities market. This longish commentary by Chris Powell was embedded in this GATA release from late last night EDT---and it's definitely worth reading. As Chris said back in April 2008---"There are no markets anymore, only interventions."
Some interesting news crossed the tape late afternoon yesterday when it was reported that the silver bullion banks (Deutsche Bank, Bank of Nova Scotia and HSBC) were sued for manipulating the silver fix in a class-action lawsuit. However, a closer look reveals that the plaintiff in the lawsuit, J. Scott Nicholson, has a recurring bone to pick with the banks as this is certainly not his first lawsuit alleging precious metals rigging, and as such we are convinced it will be tossed out shortly, along with every other lawsuit alleging a manipulated precious metals market since discovery could lead to some very unpleasant revelations about the primary source of gold and silver rigging: the central banks themselves, alongside the BIS.
Instead, we uncovered something that was missed several few weeks earlier: a far more informative and detailed class action lawsuit filed by Edward Derksen on July 9, 2014 against the London gold fix member banks: Bank of Nova Scotia, Barclays, Deutsche, HSBC and SocGen (profiled here in From Rothschild To Koch Industries: Meet The People Who "Fix" The Price Of Gold).
Recall from "How Gold Price Is Manipulated During The "London Fix"" that this was one of the first conspiracy theories about gold manipulation to end with a bank, and following the official revelation (as opposed to merely on the pages of fringe blogs) that over 100 years the price of gold was consistently manipulated during the London fix (and during every other period as well but that is a revelation for a different time) the very process of the Gold and Silver Fix itself was finally ended (only to be replaced with a comparable process run by the very same people who manipulated gold and silver from Rothschild's London office on St. Swithin’s Lane for decades.
This very long article was posted on the Zero Hedge website at 6 p.m. EDT on Sunday evening---and it's worth your time if you have any left. If you find the charts familiar, it's because they're all the work of Dimitri Speck and Nick Laird---and a decade in the making. You've seen most of them in my column many times over the years.
The Perth Mint's Bron Suchecki calls attention to what seems like a serious discrepancy in the gold exchange-traded fund GLD's accounting of its gold bars.
The discrepancy is headlined "GLD Trade Spreadsheet vs. GLD Bar List" and is detailed at the Screwtape Files Internet site. I found this gold-related story embedded in a GATA release yesterday.
"Is there any gold in Fort Knox?" was one of the most frequently asked questions I got when I was the director of the U.S. Mint.
The answer is yes.
The U.S. Bullion Depository, commonly known as Fort Knox, was built to accommodate the dramatic increase in gold reserves resulting from President Franklin D. Roosevelt's controversial executive order in 1933. The gold reserves of the United States from 1933 to 1937 increased threefold to approximately $12 billion because Americans were forced to sell their gold coins to the Federal Reserve and accept bank notes instead.
Completed in 1936 on land transferred from the U.S. Army, it took more than 500 train cars to deliver the existing gold bullion, newly made bullion bars from the melted coins and some gold coins. They came mostly from Philadelphia and the New York Assay Office.
This is all very interesting, especially what he has to say in the last paragraph. One has to wonder who has title to all this gold---and what the purity is? Does part of this belong to Germany---and is it coin melt? Questions with no answers---and this commentary doesn't help. It was posted on the moneynews.com Internet site way back on June 6---and I thank Michael Cheverton for sliding it into my in-box just after midnight.
Call it bitgold.
It’s what you get when you combine bitcoin, one of the world’s newest would-be currencies, and gold, one of the oldest. Add mistrust of centralized authority, a dash of rebelliousness and a dollop of profit motive and you might have the Independence Coin, the first gold-backed crypto-money, unveiled this month at FreedomFest, a libertarian convention in -- where else? -- Las Vegas.
“A staunch person who believes in the gold standard says bitcoin is valueless and ultimately a Ponzi scheme, and people who didn’t dig gold but really got bitcoin would say that this is ridiculous, it’s just a dumb metal,” Anthem Hayek Blanchard, chief executive officer of Anthem Vault Inc., the company behind the Independence Coin, said in an interview. “We don’t need to fight. We can coalesce.”
This very interesting Bloomberg story appeared on their Internet site at 10 p.m. Denver time on Sunday evening---and I thank Casey Research's own Laurynas Vegys for passing it around yesterday. It's worth reading.
In a fresh possible headache for regulators, including in India, "gold for bitcoin" trades are emerging as a new fad in the world of anonymous transactions, fueling further the appetite for virtual currencies.
This comes at a time when the count of virtual currencies available in the market is fast moving closer to the 500 mark, although the price of top-ranked bitcoin has begun showing signs of stability at around $500-$600 level after remaining highly volatile for most part of its half a decade existence.
According to bitcoin traders, the stabilisation in bitcoin rates is making the case stronger for exchanging them for gold, which currently trades at less than $1,300 per ounce or about Rs28,000 per 10 grams in India.
This is another very interesting story about gold and bitcoin---and it's worth reading as well. It was posted on the business-standard.com Internet site on Sunday IST---and was filed from New Delhi. I found it on the gata.org Internet site yesterday.
Interviewed on "Get Real," the television program of The Real Asset Co.'s Jan Skoyles, GoldCore's Mark O'Byrne discusses silver's prospects, its effective greater practical rarity than gold, and manipulation of the gold and silver markets and GATA's work exposing it.
The program is 27:51 minutes long and was posted on the youtube.com Internet site last Friday. I've only had time to listen to the first half---and up to that point I'd give it a miss. It does improve markedly in the second half, which starts just before the 14-minute mark---and even GATA gets a mention there. Ted Butler's name didn't come up, but just about everything silver-related in the second half of the interview has his name written all over it. If you start watching at the 14-minute mark, you won't have missed much---and the second half is worth your time. This silver-related story is something I found in another GATA release from yesterday.
With great persistence and a little encouragement from GATA our friend R.B. in Britain has more or less solved the mystery of the Financial Times' quick deletion from its Internet site of its February 24 report about gold market manipulation, "Fears Over Gold Price Rigging Put Investors on Alert; German and U.K. Regulators Investigate."
The explanation is pretty much what one might expect: For the Financial Times, one of the many news organizations to which GATA repeatedly has provided its full documentation of gold price suppression by Western central banks---the issue is simply too "sensitive."
In fairness to the FT, please note that the issue seems to have been too "sensitive" for all those other news organizations as well.
R.B.'s account of his repeated inquiries to the Financial Times is appended.
This must read commentary was posted on the gata.org Internet site yesterday.